The Mark as Paid toggle on the AP Invoice enables automatic AP Payment creation for the invoice once it is approved. Users can toggle Mark as Paid for specific invoices or can enable Default Mark as Paid on the vendor record. When Mark as Paid is toggled on, upon approval an AP Payment is created for the invoice. The payment amount will reflect the amount due on the invoice when the invoice was approved and the due date is used as the payment date. This function is intended for vendors that have a one-to-one relationship between invoices and payments, and should be used with caution.
When Default Mark as Paid is enabled on the vendor record, Mark as Paid is automatically toggled on for all invoices created for that vendor.
Prerequisites:
One-to-One Relationship: There is a one-to-one relationship between the invoice and the payment. For example, an invoice for $500 should be paid with one $500 payment rather than multiple smaller payments. If payments are split or combined incorrectly, it can make transaction matching in bank activity more difficult.
Payment Terms: The payment term has been set with the bank activity date in mind.
Mark as Paid creates an AP Payment using the Invoice Due Date as the payment date.
The AP Payment date needs to be on or before the date of bank activity to auto-match.
Applied Credit Memos: Credit memos reduce the amount due on the invoice, and thus reduce the AP payment that will be auto generated by the Mark as Paid function.
If a credit memo needs to be applied to the invoice, it should be done prior to approving the payment. The resulting payment will be the invoice amount minus the credit memo amount.
Mark as Paid on Invoices
Users can click Mark as Paid to create a single payment for an individual invoice. An additional field will appear, where the bank account for the AP payment can be entered.
If Default Mark as Paid is enabled on the vendor record, Mark as Paid will be automatically toggled on.
Before approving the invoice for AP payment creation, the following fields must be reviewed:
Due Date: The due date is used as the payment date on the AP payment that is generated.
Ensure the due date is on or before the expected date of bank activity to allow for auto-matching.
Bank Account: The bank account entered must reflect the account that funds will be withdrawn from.
Amount Due: The amount due is used as the payment amount, and must match the amount that will be reflected in bank activity to allow for auto-matching.
Invoice Approval and Mark as Paid
Once an invoice with Mark as Paid toggled on has been approved, an AP Payment will be created and applied to the invoice using the following information:
AP Payment date: Uses the due date from the invoice.
The due date is set by the payment terms on the vendor record. If payment terms were not set, the due date defaults to the document date of the invoice.
Bank Account: Uses the location’s bank account or the bank account selected on the vendor record.
This is dependent on the Default Mark as Paid settings selected on the vendor record.
Location: Uses the header location from the invoice.